Bumi’s Deadly Coal

jatam edit                 greenpeace edit

Media Release

21 August 2014

New Report Reveals Extensive Water Contamination and Human Rights Violations by Bumi’s KPC Coal Mine

Jakarta: Indonesia’s largest coal mine, PT Kaltim Prima Coal (KPC), owned by PT Bumi Resources and TATA India, has been associated with human rights abuses and massive environmental contamination, according to a new report released today by JATAM, Indonesia’s Mining Advocacy Network.

The report exposes the massive environmental and social liabilities incurred by Bumi’s biggest asset, the KPC coal mine, just as the company goes into selective default as a result of failure to make scheduled payments to its bondholders embattled company now faces a dual threat of unpaid social and environmental liabilities coupled with a major default as a result of outstanding debts to its creditors, which include Credit Suisse, Deutsche Bank, the China Development Bank and China Investment Corporation.

“The KPC coal mine is contaminating several major rivers in East Kalimantan anddestroying the livelihoods of thousands of indigenous Dayak peoples. People have been provided with no compensation from the government or the company. They now face increased flooding, have lost land and other resources, and are forced to buy water. In East Kalimantan, coal is not only a dirty form of energy that damages our climate, but it is also deadly, killing people and biodiversity,” said Merah Johansyah of JATAM East Kalimantan, one of the report’s authors.

The KPC mine is located in the Indonesian province of East Kalimantan and produces 50 million tonnes of coal per annum, making it one of the world’s largest coal mines. JATAM conducted a field visit to KPC’s project sites in June 2014, visiting three affected villages and the Sangatta township. The report documents the following impacts:

  • Wastewater from KPC’s mines is frequently discharged untreated into the Sangatta and Bengalon Rivers, contaminating river water that is used by villages downstream and killing fish and other aquatic organisms.
  • Studies have shown that the Sangatta River is especially contaminated with heavy metals, with lead concentration reaching 18 times the regulated level, making it unsafe to consume or use. Communities now have to buy water for their daily needs.
  • The mine has caused frequent flooding downstream, affecting at least three villages and a main road in the region. Villagers have received no aid or compensation from the government or KPC
  • Villagers report serious dust and noise disruptions from blasting, which occurs frequently without any prior announcement. The blasting has shattered window panes and caused cracks in buildings. Children wake up crying in shock and fear from nighttime blasting.
  • Indigenous Basap Dayak villagers from Keraitan village have already been moved from their ancestral homelands and are now facing another relocation. KPC has been intimidating people to force them to move, and the local municipality has stopped providing health workers or teachers to the village. Villagers from Keraitan and other relocation sites report having insufficient land to cultivate or hunt.

Share prices of Bumi Resources, the financially troubled holding company of KPC, have plummeted 71% over the past year. Swiss bank Credit Suisse, along with China Investment Corporation and the China Development Bank, have been heavily involved in bankrolling the corporation. J.P Morgan Chase and Deutsche Bank have also acted as underwriters for Bumi Resources, despite the company’s poor financial performance. The company is frantically trying to renegotiate bond repayments with investors, and has negotiated a complicated debt-equity swap with the Chinese sovereign wealth fund CIC to avoid defaulting on its debt.

“We call on all banks, financiers and shareholders of Bumi Resources to use their influence with this company and their subsidiaries to bring an end to the problems of KPC. If this does not happen immediately, they should cancel their loans and commit to issue no more loans or purchase no more shares or bonds in Bumi Resources or any company associated with it and take steps toward public divestment from these companies,” said Arif Fiyanto, Climate and Energy Campaigner with Greenpeace Southeast Asia.

Download the report

For more information contact:

• Merah Johansyah, JATAM East Kalimantan, Tel: +62 813 4788 2228 [email protected]

• Arif Fiyanto, Greenpeace Southeast Asia, Tel: +62 811-180-5373 [email protected]

• Lauri Myllyvirta, Greenpeace International (Poland), Tel: +48 66 40 66 382, [email protected]